This game was fun and made me wonder: have I ever seen a damn flag in my life? Seems like a simple thing, then you get in there and don't know most of them.
I was surprised at how much my random guesses were correct, based on the style of the flags. (Mostly getting it wrong, but maybe 20% success rate)
There is definitely a clustering of design styles. British territories for example tend to have elements of the Union Jack incorporated. Germany, Luxembourg, Italy, that area tend to have more the simple 3 stripe designs.
I found myself occasionally guessing a right answer for flags in regions I knew very little about. I guess that sort of knowledge about design trends seeped in somehow.
I recommend Anki. I've been learning flags (and capitals etc) ~1 year ago. After a few months break I have finished this game with a 97% accuracy (missed 5 countries). I would not get as good without multiple-choice, but it's still nice to see how many flags I did still recall.
Re >> that nobody's ever heard
I think you just hurt their feelings. It's okay São Tomé and Príncipe, I've heard of you.
But jokes aside: yes, you are quite correct. There are a surprising amount of small island nations, republics, and dependencies that many of us have never heard of.